Weekly tax brief | 2 November 2021

Is environmentally sustainable also fiscally sustainable?
George Bull
Comparing the Government’s Net Zero Policy with its Budget proposals exposes a chasm between words and actions, between the environmental rhetoric surrounding COP26 and the Treasury’s plans for UK taxes. We identify four key fiscal failings and review the benefits which could be achieved by a new form of carbon tax.

Does a change in location change how income is taxed?
Rob Williams
As remote and hybrid working prove to be ever more popular in a post-pandemic world, are people aware of the impact a change in location can have on their income tax position?

A preliminary estimate by HMRC suggests that the VAT gap is closing, but what have we learned?
Phil Munn and George Bull
HMRC's latest estimates suggest that the Exchequer was denied £9.8bn of VAT receipts due in the year to April 2021. Whilst this is a staggering sum, it actually represents a fall in the VAT gap compared to the previous year, in both total terms (the 2020 figure was £12.3bn) and in relative terms (2020 8.4 per cent versus 2021 7.5 per cent). Does this represent a validation of HMRC policy on matters such as MTD, the increasing investment in evasion prevention measures, or is something else going on?

Over three quarters of NHS workers to suffer in proposed pension contributions shake up
James Gransby
An open consultation released by the Department of Health and Social Care on 19 October recommends that many lower paid NHS workers should have their pension contributions increased. This will result in less take home pay for thousands of staff, adding more financial pressure at a time when the cost of living is increasing and pay rises are below inflation.

Budget silence on capital taxes
Jackie Hall
Prior to the Budget, speculation about increases in capital gains tax (CGT) rates, restrictions on inheritance tax (IHT) reliefs and even the possibility of a wealth tax, was rife. In the end, concerns were unfounded, for now at least.